Monday, April 23, 2012
Press release from the issuing
company
Standard Register today announced
its financial results for the first quarter 2012. The Company reported revenue
of $157.6 million and a net loss of $5.1 million, or $0.18 per share. The
results compare to prior year revenue of $164.9 million and net income of $0.4
million, or $0.01 per diluted share. Non-GAAP net income, adjusted for pension
loss amortization, pension settlement, restructuring, and deferred tax
valuation allowances was $1.9 million, or $0.06 per share, for the first
quarter of 2012 as compared to non-GAAP net income of $4.1 million, or $0.14
per diluted share for the same period in 2011.
"We saw significant positive
activity in the first quarter of 2012 as Healthcare, Financial Services and
Commercial Markets business units grew Core solutions during the period.
Combined with the on-schedule implementation of our restructuring plan, this
gives us good momentum. While revenue was down overall from the year-ago
quarter, we have a strong current ratio of 1.9, adequate liquidity for
operations and expect to end 2012 with positive cash flow of at least $5
million," said Joseph P. Morgan, Jr., president and chief executive
officer.
Morgan continued, "We continue
to make the necessary investments to transform Standard Register into a
provider of solutions that enable our customers to align their brand
communications with their corporate priorities and standards. We are seeing our
portfolio evolve and winning new business that demonstrates good
progress."
Results
Total revenues declined 4 percent to
$157.6 million in the first quarter versus $164.9 million in the prior year.
Core priority growth solutions revenues grew 3 percent during the quarter
whereas Legacy products, such as business forms and transactional labels,
across all business units declined by 9 percent.
Healthcare revenue declined 6
percent to $57.0 million in the first quarter compared to $60.7 million in the
prior year. Core solutions grew by 5 percent driven by the acquisition of 100
percent of the ownership interests in iMedConsent, LLC (dba Dialog Medical),
which the Company completed in the third quarter 2011, as well as new business
and organic growth in patient communications and patient identification and
safety solutions. Healthcare technology solutions sales grew 15 percent in the
quarter. Legacy products, primarily clinical documents and administrative forms
sales declined 12 percent as customers advanced implementation of Electronic
Medical Records (EMR) initiatives.
Financial Services revenue showed
slight growth at $43.5 million in the first quarter compared to $43.3 million
in the prior year. The Company began recognizing revenue from a new Core
solutions customer and saw growth in existing smaller customers. These sales
served to offset the loss of Legacy and Core solutions from a customer that is
expected to impact revenues in this segment by $18 - $20 million this year.
The Commercial Markets business unit
experienced a 7 percent decline to $37.6 million for the quarter from $40.3
million in the prior year driven primarily by losses in Legacy products, which
represent a disproportionate amount of sales in the business unit. Momentum in
Core marketing solutions is expected to grow during the remainder of 2012.
The Industrial business unit
generated $19.5 million in revenue or a decline of 5 percent for the quarter as
compared to $20.6 million a year ago, driven by pricing pressure and weak
demand from HVAC customers, and a 49% decrease from the year-ago quarter for
in-mold labeling sales related to timing.
Gross margin as a percent of revenue
decreased to 30.6 percent for the current year quarter from 32.4 percent in the
prior year quarter. Pricing pressures, particularly in Legacy transactional
forms and labels, declines in volume and material cost increases all
contributed to the change. Selling, general and administrative expenses,
excluding pension and restructuring, declined $1.8 million to $44.4 million, or
28.2 percent of revenue, relative to $46.2 million and 28.0 percent for the
prior year quarter.
For the first quarter 2012, capital
expenditures were $0.7 million, pension funding contributions were $7.0 million
and Non-GAAP cash flow on a net debt basis was $3.4 million. For 2012, the
Company is planning to spend $9 - 11 million in capital expenditures to further
support its Core growth solutions offering and to contribute at least the minimum
requirement of $27.0 million for Pension funding.
Conference Call
Standard Register's President and Chief Executive
Officer Joe Morgan and Chief Financial Officer Bob Ginnan will host a
conference call at 10:00 a.m. EDT on April 20, 2012, to review the first
quarter results. The call can be accessed via an audio web cast accessible
at: http://www.standardregister.com/investorcenter.
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